SkyAI, Inc. Segments Disclosure

Note 18. Segment Reporting

 

We determine operating segments based on metrics that our Chief Operating Decision Makers (“CODM”) review internally to manage our business, including resource allocation and performance assessment. In 2025, as a result of the previously mentioned treasury policy, management re-evaluated our segment reporting structure and determined that we now operate in two reportable segments other than our corporate activities. Our CODM regularly review financial results based on the two operating segments consisting of Medical Device Packaging and Digital Asset Treasury.

 

Medical Device: This segment is responsible for executing and managing the Company’s medical device sales and distribution business.

 

Digital Asset Treasury: This segment is responsible for executing and managing the Company’s treasury platform.

 

The CODM uses segment operating income (loss) to evaluate operating segment performance and allocate resources.

 

 

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

 

 

Note 18. Segment Reporting (continued)

 

Segment income (loss) excludes the impact of income taxes, interest expense, and certain other income (expense) items, as these are managed at the corporate level. We do not prepare separate balance sheets by operating segment for the CODM, as assets are not evaluated as part of operating segment performance and resource allocation. We provide the CODM depreciation and amortization expense and impairment charges that are generated from operating segment-specific assets, as these are included in segment net (loss).

 

The accounting policies for the segment information are the same as described in Note 2 - Summary of Significant Accounting Transactions. Transactions between segments are reported as if each were a stand-alone business and are eliminated in consolidation. Historically, the Medical Device segment has included manufacturing. Accordingly, for the years ending December 31, 2025 and 2024 respectively, approximately $1.5 million and $2.3 million medical device segment expenses were included as part of discontinued operations. Certain payroll and consultant expenses were allocated among segments on the basis of the estimated percentage of time spent on each segment.

 

The following table presents the Company’s segment results for the year ended:

 Schedule of Company’s Segment

		Medical Device Packaging				Digital Assets				Corporate				Consolidated				Medical Device Packaging				Corporate				Consolidated
		TWELVE MONTHS ENDED DECEMBER 31,																TWELVE MONTHS ENDED DECEMBER 31,
		2025				2025				2025				2025				2024				2024				2024
		Medical Device Packaging				Digital Assets				Corporate				Consolidated				Medical Device Packaging				Corporate				Consolidated
Net Revenue		$	204,120				-				-				204,120			$	-				-				-
Cost of goods sold			198,576				-				-				198,576				-				-				-
Cost of goods - inventory reserve			418,869				-				-				418,869				-				-				-
Total cost of goods sold			617,445				-				-				617,445				-				-				-
Gross Margin (Loss)			(413,325	)			-				-				(413,325	)			-				-				-
Staking Revenue			-				6,805,009				-				6,805,009				-				-				-
Operations:
Warrant issuance – related party			-				101,331,513				-				101,331,513				-				-				-
Consulting fees – related parties			-				3,433,333				-				3,433,333
Selling, general and administrative			132,539				1,079,853				14,839,676				16,052,069				472,604				4,563,763				5,036,367
Research and development			198,762				-				-				198,762				531,233				-				531,233
Unrealized loss on digital assets			-				152,952,163				-				152,952,163				-				-				-
Realized loss on digital assets			-				1,286,284				-				1,286,284
Digital asset transaction expenses			-				872,934				-				872,934				-				-				-
Total operating expenses			331,301				260,956,081				14,839,676				276,127,058				1,003,837				4,563,763				5,567,600
Loss from operations			(744,626	)			(254,151,072	)			(14,839,676	)			(269,735,373	)			(1,003,837	)			(4,563,763	)			(5,567,600	)
Other income (expense):
Interest income (expense)			-				(20,556	)			(396,105	)			(416,660	)			-				(1,664,712	)			(1,664,712	)
FMV adjustment on warrants			-				-				4,803,098				4,803,098				-				3,016,936				3,016,936
Realized loss on derivatives			-				(4,986,500	)			-				(4,986,500	)			-				-				-
Other income (expense):			-				-				-				-				-				(1,009,891	)			(1,009,891	)
Total Other income (expense)			-				(5,007,056	)			4,406,993				(600,063	)			-				342,333				342,333
Loss from Continuing Operations			(744,626	)			(259,158,127	)			(10,432,683	)			(270,335,436	)			(1,003,838	)			(4,221,429	)			(5,225,266	)
Discontinued Operations:
Loss from discontinued operations			(11,220,342	)			-				-				(11,220,342	)			(4,100,935	)			-				(4,100,935	)
Loss on disposal			(1,078,348	)			-				-				(1,078,348	)			-				-				-
Income tax benefit			132,000				-				-				132,000				30,000				-				30,000
Loss from Discontinued Operations			(12,166,690	)			-				-				(12,166,690	)			(4,070,935	)			-				(4,070,935	)
Net Loss			(12,911,316	)			(259,158,127	)			(10,432,683	)			(282,502,126	)			(5,074,772	)			(4,221,429	)			(9,296,201	)
Total Consolidated Assets		$	849,388			$	257,253,661			$	10,972,124			$	269,075,173			$	564,029			$	2,311,513			$	2,875,542

 

Note: Net Loss by Segment includes Corporate, although not a reportable segment, only for reconciliation to the consolidated statement of operations.

 

 

SHARPS TECHNOLOGY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024